Eastland v. Eastland

• Decision Date: 09 December 2008
• Docket Number: No. 14-07-00581-CV.,14-07-00581-CV.
• Citation: 273 S.W.3d 815
• Parties: Richard G. EASTLAND, Appellant v. S. Stacy EASTLAND, Appellee.
• Court: Texas Court of Appeals

273 S.W.3d 815

Richard G. EASTLAND, Appellant v. S. Stacy EASTLAND, Appellee.

No. 14-07-00581-CV.

Court of Appeals of Texas, Houston (14th Dist.).

December 9, 2008.

Justin M. Campbell III, Houston, Timothy D. Zeiger, Dallas, A.W. Arnold, III, Kerrville, TX, for appellants.

Joseph S. Horrigan, C. Vance Christopher, Houston, TX, for appellees.

Panel consists of Justices YATES, SEYMORE, and BOYCE.

OPINION

BOYCE, Justice.

Appellant Richard G. Eastland ("Richard") challenges the appointment of his brother, appellee S. Stacy Eastland ("Stacy"), as successor independent executor of the estate of their father, Seaborn Eastland, Jr. Richard contends the probate court (1) erred by appointing Stacy as successor independent executor without notice in violation of Texas Probate Code § 220(a) (Vernon 2003); and (2) abused its discretion in finding that (a) Stacy was not unsuitable to be appointed successor independent executor, and (b) there was a continued need for administration of the estate. We affirm.

Background

Seaborn Eastland, Jr. died testate on December 8, 1990. Under the terms of his will, an independent administration of his estate was required. Accordingly, Mr. Eastland named his wife, Anne Eastland, as independent executrix. He also named Stacy as successor independent executor should Anne Eastland "for any reason fail [ ] or cease[ ] to serve as such."

Anne Eastland duly qualified as independent executrix of the estate, and letters testamentary were issued to her on December 26, 1990. She served as independent executrix of the estate until her death on January 20, 2005.

Pursuant to a provision in Seaborn Eastland, Jr.'s will, Richard owned majority voting control of Camp Mystic, Inc. ("Camp Mystic"). The remainder of Camp Mystic's stock was bequeathed to Stacy, his sister, his mother, and other Eastland family members either outright or through various trusts. Camp Mystic was reorganized in 1998 to address potential liability from its operation of a private summer camp. The reorganization created two separate corporations: the "new" Camp Mystic corporation, and Natural Fountains Properties, Inc. ("Natural Fountains").

Natural Fountains is owned by the same individuals and trusts that continued ownership of the "new" Camp Mystic corporation. Richard is the majority shareholder and president of Natural Fountains, and one of its directors. Stacy is a director and minority shareholder of Natural Fountains.

By virtue of the 1998 reorganization, Natural Fountains owns more than 700 acres in Kerr County. In turn, Natural Fountains leases this acreage to Camp Mystic for operation of its summer camp. The lease agreement between Camp Mystic and Natural Fountains provides that rent will be set annually by Natural Fountains' board of directors. From 1998 through 2006, Camp Mystic's rent was set by unanimous vote.

On November 14, 2006, Stacy filed suit individually and as a trustee against Richard individually and as a trustee in Harris County Probate Court No. 2 seeking declaratory relief "relating to certain trusts created under the Last Will and Testament of Seaborn Eastland, Jr." Notice and a copy of that pleading were served on Richard in January 2007.

On March 20, 2007, Richard sued Stacy and others in Kerr County District Court seeking a declaration of the rights, status, and legal relations of Camp Mystic and Richard pursuant to the lease between Camp Mystic and Natural Fountains. Richard sought a declaration that Camp Mystic had fully or substantially performed its contractual obligations to Natural Fountains, including payment of rent in full from 1998 to 2006. In his petition, Richard also asserted that Stacy asked Richard, in Richard's capacity as president of Natural Fountains, to declare Camp Mystic in default due to alleged underpayment of rent.

On April 3, 2007, Stacy filed his application for appointment as successor independent executor of Seaborn Eastland, Jr.'s estate in Harris County Probate Court No. 2. No citation or notice to interested persons was given.

On April 4, 2007, Stacy filed suit against Richard in Harris County Probate Court No. 2 complaining of alleged breaches of trust and fiduciary duty, including allegations that Richard failed to notify Natural Fountains' board of directors of offers to purchase some or all of Natural Fountains' land. Stacy asserted the claims in a number of capacities, including as the "named successor Independent Executor of the Estate of Seaborn Eastland, Jr."

On April 11, 2007, the probate court signed an order granting Stacy's application for appointment as successor independent executor.

On April 23, 2007, Richard filed a motion for new trial and to vacate the order appointing Stacy as successor independent executor, and an objection to the appointment of Stacy as successor independent executor. The probate court held a hearing on the motion for new trial on June 21, 2007, and heard testimony regarding Stacy's suitability to be appointed successor independent executor and the necessity for continued administration of the estate.

During the June 21 hearing, Richard questioned Stacy regarding his suitability to serve as independent executor and the need for continued administration of the estate of Seaborn Eastland, Jr. Stacy testified that continued administration was required because, after receiving his father's files and records following his mother's death in 2005, he became aware of other property owned or potentially owned by the estate, and claims owing or potentially owing by the estate and to the estate.

Stacy testified at the June 21 hearing that the assets he discovered included a mineral interest his father owned, which previously had been overlooked and never distributed. Stacy testified that he was told in early 2007 that the independent administrator of the estate of one of his father's former law partners planned to file suit against the law firm. That lawsuit was filed in March 2007, and the petition in that lawsuit alleged that there was vicarious liability on the part of the firm's partners during Seaborn Eastland, Jr.'s tenure. Stacy testified that he expected his father's estate to be joined as a party to that lawsuit. Stacy testified that any potential liability of his father's estate in that lawsuit could affect the estate's portion of an income stream from his father's former law firm, subjecting the estate to potential liability for continuing to distribute this income to the beneficiaries of the will. Stacy also testified about potential estate liability based upon an indemnification agreement with another of his father's former law partners stemming from a different lawsuit. Additionally, Stacy testified that his November 14, 2006 suit against Richard sought construction of their father's will.

At the conclusion of this hearing, the probate court signed an order denying Richard's motion for a new trial and motion to vacate the order appointing Stacy as successor independent executor, and overruling Richard's objection to the appointment of Stacy as successor independent executor. The probate court found that Stacy was not unsuitable to be named the successor independent executor of the estate of Seaborn Eastland, Jr., and that necessity existed for continued administration of the estate. Richard now challenges on appeal the probate court's appointment of Stacy as successor independent executor.

Appellate Jurisdiction

A probate court order determining who may serve as an independent executor is appealable because it "finally adjudicates a substantial right." See Tex. Prob. Code Ann. § 5(g) (Vernon Supp.2008); Logan v. McDaniel, 21 S.W.3d 683, 688 (Tex. App.-Austin 2000, pet. denied); Spies v. Milner, 928 S.W.2d 317, 318-19 (Tex.App.-Fort Worth 1996, no writ); see also De Ayala v. Mackie, 193 S.W.3d 575, 578 (Tex.2006) ("Probate proceedings are an exception to the `one final judgment' rule; in such cases, `multiple judgments final for purposes of appeal can be rendered on certain discrete issues.'") (quoting Lehmann v. Har-Con Corp., 39 S.W.3d 191, 192 (Tex.2001)).

Standard of Review

This appeal turns in part on the meaning of certain provisions in the Probate Code. Statutory construction is a legal question that we review de novo, ascertaining and giving effect to the legislature's intent as expressed by the plain and common meaning of the statute's words. F.F.P. Operating Partners, L.P. v. Duenez, 237 S.W.3d 680, 683 (Tex.2007).

We review a probate court's finding regarding unsuitability to serve as independent executor for abuse of discretion. In re Estate of Gaines, 262 S.W.3d 50, 56-57 (Tex.App.-Houston [14th Dist.] 2008, no pet.). We also review the probate court's determination regarding necessity for administration for a clear abuse of discretion. King v. Estate of Balshaw, No. 01-89-00370-CV, 1990 WL 11977, at *3 (Tex. App.-Houston [1st Dist.] Feb. 15, 1990, no writ).

Analysis

Richard argues that the probate court (1) failed to comply with notice requirements under section 220(a) of the Texas Probate Code when it appointed Stacy as successor independent executor for the estate of Seaborn Eastland, Jr.; and (2) abused its discretion in finding that (a) Stacy was not unsuitable to be appointed successor independent executor, and (b) there was a continued need for administration of the estate. Richard asserts that these findings are not supported by the evidence in this case. We address each contention in turn.

I. Applicability of Texas Probate Code Section 220(a) to the Appointment of Stacy as Successor Independent Executor

Richard contends that section 220(a) applies to the appointment of Stacy as successor independent executor; requires notice to interested parties, except when immediate appointment is necessary; and was violated when Stacy was appointed without notice to Richard. Stacy contends that notice of his appointment as successor independent executor was not required because section...